IMF report backs return to surplus: Swan

The Federal Government has used a slight International Monetary Fund downgrade of Australia's economic outlook to push its case for a return to surplus as business leaders continue their attacks on the plan.

The IMF's World Economic Outlook report for April says Australia is projected to experience 3 per cent growth this year, down from the 3.3 per cent prediction last September.

Unemployment is expected to remain steady at 5.2 per cent, but the IMF says Australia is among a number of countries that remain vulnerable to global financial markets.

Treasurer Wayne Swan says the projections are in line with those released by Treasury in its mid-year budget update late last year.

He says given Australia's strong investment prospects, a surplus was the "best defence" for Australia at a time of global economic uncertainty.

"The IMF forecasts show that the Australian economy will outperform every other major advanced economy this year and next," Mr Swan told AM.

"I think a surplus in the conditions that Australia finds itself is the responsible thing to do."

Prime Minister Julia Gillard also defended the surplus plan, saying she believed her Government was taking the right approach.

"What the IMF is telling us and what our own economic forecasts tell us is that we have an economy that is returning to trend growth, and so the right thing to do when the economy is growing like that is to bring the budget back into the black," Ms Gillard said.

The comments came after Industry Super Network chairman Garry Weaven told AM that balancing the books next financial year was not essential, while former Commonwealth Bank chief Ralph Norris told Fairfax Media the plan was "mindless" and the biggest threat to the Australian economy.

Opposition Leader Tony Abbott also seized on the IMF report, saying it was proof that the Australian economy was "underperforming".

"It forecasts 3 per cent for the current financial year and it looks like we are going to get 2 per cent," Mr Abbott said.

"This is an underperforming economy and it's underperforming because of the poor economic management of the current government."

He says it is important to return the budget to surplus but does not agree with the government's methods.

"The way to get back to surplus is not to increase taxes, which is what this government is doing," he said.

"The way to get back to surplus is to eliminate wasteful and unnecessary government spending."

Mr Weaven said the Government had backed itself into a corner by insisting on a return to surplus.